I recently had an oppor­tu­nity to sit down with Lyle Fong, the CEO of Lithium. Lithium recently part­nered with Omni­ture to pro­vide a holis­tic view of user behav­ior on social net­works. This post is the sec­ond in a three-part series.

Chris: What is the most impor­tant aspect that enter­prises should be think­ing about with regard to social media?

Lyle: What social media really boils down to is break­ing down some of the old walls that com­pa­nies had cre­ated and engag­ing with cus­tomers online. The sta­tis­tics show that cus­tomers are already online, look­ing for a place to voice their opin­ion. Com­pa­nies need to embrace that fact and change the way they think about mar­ket­ing. Instead of lob­bing press releases and tra­di­tional cor­po­rate mes­sages to cus­tomers, it’s now about lis­ten­ing to them and giv­ing them a voice. Iden­ti­fy­ing the best cus­tomers and under­stand­ing where they are online is a key part of social media strat­egy for any busi­ness. Fun­da­men­tally, there is a cul­tural shift that must occur for com­pa­nies to actu­ally start engag­ing in dia­logue with these cus­tomers so it’s a real two-way con­ver­sa­tion. That’s why some com­pa­nies have had a harder time with this concept.

Chris: I like the notion of engag­ing in a dia­logue with the cus­tomer rather than cre­at­ing a one-way “spew” of infor­ma­tion. Social media really brings about the con­cept of “accel­er­ated Dar­win­ism.” Given the fre­netic pace of our online ecosys­tem and the abil­ity of any­one to now explore the com­pe­ti­tion, brands can lit­er­ally be tran­si­tioned at the click of a but­ton. Com­pa­nies now need to have a height­ened focus with regard to cus­tomer engage­ment. What are you see­ing with regard to cus­tomer engagement?

Lyle: You’re exactly right. Con­sumers today are grow­ing more dis­trust­ful of larger insti­tu­tions.
Con­sumers are now look­ing to their peers to tell them what they should buy. For exam­ple, peo­ple buy lap­tops based on what their peers rec­om­mend. They are actu­ally more will­ing to trust them than even an expert from PC World. The chal­lenge is that this infor­ma­tion is now out there and is now acces­si­ble to every­one. This lev­els the play­ing field and cre­ates an oppor­tu­nity for smaller companies.

The cause of this shift is that peo­ple are look­ing for oth­ers with sim­i­lar inter­ests . They are out there talk­ing about what they like and don’t like. If the com­pany doesn’t have a com­mu­nity, they join another one. They believe their peers and switch brands and products.

A good exam­ple of this is with AT&T wire­less (one of our cus­tomers). They found that one woman spends 7–8 hours a day help­ing oth­ers by answer­ing ques­tions about the best rate plans, phones to pur­chase, and more. Recently she achieved the high­est level sta­tus on the com­mu­nity. The funny thing is, she is not even an AT&T Cus­tomer! Because she built up a rep­u­ta­tion on the AT&T site, she is now count­ing down the days until her con­tract with the com­pe­ti­tion is up so she can switch to AT&T. This same thing is hap­pen­ing with sev­eral large com­pa­nies like Cisco.

Chris: Inter­est­ing. Can you describe how this con­cept of a “social peck­ing order” works within these communities?

Lyle: This is the fun­da­men­tal thing that Lithium does best. We have iden­ti­fied over the years that the way you build suc­cess­ful, vibrant com­mu­ni­ties is not nec­es­sar­ily by cater­ing to the “masses.” Rather, cater to the hard-core users. These can be your evan­ge­lists– the users that influ­ence oth­ers to use your prod­ucts. The big prob­lem is that many com­pa­nies don’t know who these peo­ple are. Our approach to social media was heav­ily influ­enced by the online gam­ing indus­try. We actu­ally built our soft­ware as if it were a game such as “World of War­craft” or “Quake.” The same rea­sons why peo­ple play these games for hours and hours a day can be applied to enter­prise soft­ware communities.

For exam­ple, the con­cept of online rep­u­ta­tion can be a pow­er­ful cat­a­lyst for cre­at­ing active par­tic­i­pa­tion within a com­mu­nity. We track over 100 dif­fer­ent met­rics for any given users. For exam­ple, the num­ber of posts, page views, how long they visit the site, what peo­ple think of them, etc.

We build for our cus­tomers a rank­ing sys­tem that is hier­ar­chi­cal, not lin­ear. It takes all of these met­rics into account to build rep­u­ta­tion. In the case of the woman on AT&T, when she started in the com­mu­nity she was a “new­bie” and her name was in black like most of the other com­mu­nity mem­bers. As she built her rep­u­ta­tion by help­ing other users, her name changed to red, then appeared in bold, then had an icon next to it. With each of these rep­u­ta­tion “upgrades,” she received more priv­i­leges, was invited to give beta feed­back, got access to exclu­sive parts of the site, and more.

This rank­ing is power and sta­tus within the com­mu­nity. She might have a nor­mal job like any­one else, but when she goes on this com­mu­nity, she is revered by her peers. Com­mu­nity mem­bers look up to her and ask her spe­cific ques­tions. In an online com­mu­nity, every­one starts out equal. It doesn’t mat­ter if you are a CEO or a high-school stu­dent. The only thing that sets peo­ple apart is the rep­u­ta­tion they have earned and the con­tent they pro­vide. Now that you can iden­tify these super-users, you can reward them and give them incen­tives so they will stay. By build­ing up a base of super users that will help evan­ge­lize your brand, you tap into an extremely moti­vated group of peo­ple that will do much of the mar­ket­ing for you.

Tomor­row: Super Users, and how they can help drive cus­tomer loyalty…

Jason Egan
Jason Egan

Great points on the fact that most companies have yet to engage their "hardcore" customers/visitors in open communication. In my own personal experience, Comcast and Adobe have both done excellent jobs in using Twitter (as one small example) to address the concerns and complaints of their hardcore customers. I can say right now, that I'd probably be with DirecTV if it weren't for the efforts of Comcast via Twitter (http://twitter.com/comcastcares). Most company's executives seem to understand that social media is going to shape the future. However, they are also the same "old school" executive that are still using the Web for traditional, push advertising and marketing. A failure to interact with your customers, when they are already engaged in online discussions, will only damage your brand. The brand has to become a part of the community.